5 Ways I Increased My Credit Score 200 Points.

July 7, 2021

Written by: Erica Bonilla senior credit advisor for AltoCredit Advisors

496 is what my credit report read at the end of my senior year in college. I was devastated. Everything my parents had instilled in me as a child had gone out the window when you looked at my score. I was embarrassed. Anyone who had access to my credit score, I try not to avoid. It was easier that way. Every time I saw that freecreditreport.com commercial, I cringed. No, I don't want to run my credit!

However, two years after graduating college, I had to face the music. I was now in the real world. I was able to get a decent paying job after college and that open many opportunities. However, it was time for me to move out of my parents house, and time to buy things I wanted. Renting an apartment was a nightmare, no one I mean, no one wanted to rent to me. Even though for the last two years, I paid everything on time- no latenesses, no over-the-limits. Still, My past was still there. It was like a black cloud walking with me every where I went. I decided enough was enough. I started to decipher my credit, this what I came up with:

1. Get A Credit Monitoring Program: This is a must! In order to fix your credit report, you must know what is on there. Without this information updated every 30 days, you will not be able to stay on top of what is going in your credit, what is coming out of your credit, or who has seen your credit. Through these programs, you are able to set up alerts that will notify you every time someone pulls your credit. Most people sign up after they are victims of identity theft when this is what helps prevent identity theft. This will also help you become more accountable for those high balanced cards, over the limits on your cards, and your inquiries. This additional 20 dollars you may spend a month, its well worth the cost.

2. Build your credit, don't use your credit: While fixing your credit try to avoid overusing your credit. You must focus on your goal. The more you bring those cards to high balances, or even exceed those balances it will lower your credit score. Always keep your credit cards below a 30% credit utilization ratio. It will increase your score as you pay on time. If you apply for 5 credit cards at the same time. It will not necessarily help your credit. It will probably lower your credit.

3. Use Credit, like cash: If you use your credit like cash you will not use it if you cannot afford it.When using your credit, be selective on what your using it for and the length of time it will take you to pay it. For instance, if you know it will take you over 6 months to pay a large ticket item on your cards then maybe it might make sense to wait. Reason- you may not want to put a large balance on a card that might get use again and again within those 6 months bringing that balance way above the 30% credit utilization. Your credit balance will appear each month affecting your score each time. Remember with credit card companies you seem like a risky investment if your living above your means.

4. Disputing the old, welcoming the new: Most times you will find outdated, misleading, erroneous information on your credit report. Most times creditor will sell information to collection agencies to collect monies that you may owe them. However, when this happens information can be left blank, outdated, or even incorrect on your credit report. Just like you have an obligation to pay, they have an obligation to report correctly. This is the opportunity to rectify these issues with Experian, Equifax, and Transunion. They usually do not have the information to back up certain claims because the information may be too old to retrieve in their records. Once an investigation begins, creditors and credit furnishing companies have 30 days to make sure any issues are rectified. With your credit monitoring program, you will be able to dissect your report to make sure everything is accurate.

5. Settle your old debt: sometimes creditors are willing to negotiate with you and remove certain negative items off your credit in order to receive payment. Make sure you settle old debts. It will help your credit, and give you the peace of mind of starting fresh with a clean slate. It will avoid issues in the future if you due run back into these creditors who will bring back those old feelings.

Credit is affecting employment, lending and real estate in today's market. Yet, 40 million Americans have an error on their credit report. Your credit report correlates with your credit score. After 19 short months and now over a 700 credit score, my credit report is where I want it to be, but at the time it seemed like an eternity.

Start today.